Republican Leaders Push Budget Compromise: Few Real Cuts Mandated but Aspirational Cuts Remain in the Mix
April 30, 2015 09:55 AM
Republicans who control both the House and Senate due to the November 2014 elections face their biggest test to date this week. Will they successfully navigate the minefields in order to pass a balanced budget compromise? Both chambers were able to narrowly pass separate bills without support from the Democratic minority. GOP leaders in the House and Senate have been working for weeks since then to reconcile the legislation passed in their chambers. In terms of total spending for fiscal year 2016, the bills were quite similar. Total spending was $3.789 trillion in the House bill and $3.8 trillion in the Senate bill. Both are some $200 billion less than the $4 trillion President Obama recommended in his budget.
Republicans in the House and Senate have now reached an agreement on which they will proceed to vote in their respective chambers. The agreement has been both loudly praised and vociferously condemned. Republican Leadership praised the agreement as the first since Apple introduced the iPad. One conservative Republican said the bill was an “exercise in avoidance putting politics before principle.” It will be a close vote to be sure but the compromise measure is expected to pass both chambers and be sent on to President Obama for his signature.
If the budget bill becomes law, it will be a major victory for the Republican Leadership, especially House Speaker John Boehner and Senate Majority Leader Mitch McConnell. Both leaders have announced their determination to show they have the ability to lead and get things done. Of course, much hangs in the balance regarding their ability to work with Democrats and produce results improving the well being of the nation, the economy, and national defense.
Republicans appear likely to be successful in navigating their way through the Washington maze. Any objective analysis will show that they accomplished this feat by avoiding the biggest battles. For example, Congressman Paul Ryan’s idea of privatizing Medicare, which was in the House bill, was shelved in the face of strong opposition in the Senate led by Senator Susan Collins, Chairman of the Senate Committee on Aging. Other entitlement cuts were shelved. They did agree in principle to the aspirational goal of cutting Medicare by $430 billion. While these cuts are not mandatory, Medicare advocates have taken note of the aspirational goal and are on high alert. The only mandatory cuts are instructions that direct relevant committees—the Senate Committees on Finance and Health, Education, Labor, and Pensions, and the House Committees on Ways and Means, Education and the Workforce, and Energy and Commerce—identify $1 billion in savings over 10 years, a small amount relative to projected spending over the next decade.
The compromise has angered conservatives in the House who had pushed their party to take on entitlement reform. However, the Leadership appears to have made the calculation that it can offset the loss of conservatives through support from defense hawks who received the $38 billion hike that they requested to fight terrorism, ISIL and other world threats.
House conservatives did receive the Leadership’s promise to continue working to repeal the Affordable Care Act (ACA), which Republicans refer to as Obamacare. The compromise bill, if it passes both chambers as expected, will prepare the way for the use of a fast tract procedure called “reconciliation” that allows major bills to pass with a mere majority, 51 votes, instead of the more typical 60 votes needed to overcome a Senate filibuster.
Political pundits are betting that Congress will avoid major cuts to Medicare and Medicaid in this and next year’s budget. The reasons are easily explained by the politics and the mathematics: it is all about control of the U.S. Senate. Republicans want to keep the majority in the 2016 election. However, they have to defend 24 seats for reelection while Democrats only need to defend 10 seats. The numbers suggest that Democrats have the edge in reclaiming control of the Senate. The best defense for Republicans is to fulfill their promise of governing and to do so well. It also means the party must go out of its way to avoid alienating important voting blocs.
Things always happen, however, beyond the control of either party. For example, all eyes will be on the U.S. Supreme Court this June when it announces its decision in the case of King v. Burwell. The Court will offer its opinion as to whether federal subsidies under the ACA can be used for participants in federal exchanges in addition to those established by a state. If the Court strikes down the use of such subsidies, it will, in effect, deprive some 8 million people of their access to health care, which they gained through the ACA.
The betting line is the Court will vote again to sustain the ACA by ruling the subsidies legal, or vote to strike down the subsidies while giving Congress plenty of lead-time to “repair or replace” the ACA language before the Court’s ruling becomes effective. Republicans are divided. Some prefer outright invalidation of the law. Others prefer the Court strike down the subsidies but give Congress time to make changes and rescue millions of people who need health care coverage. Democrats, of course, would prefer the Supreme Court rule in favor of the status quo.
Two things are all but certain. First, the Republican strategy will succeed or fail based on the votes in the 2016 election. Second, the tough decisions that Congress needs to make will likely remain to be resolved at some other time.
The House is expected to vote on the budget compromise this Friday, with the Senate to follow on a day to be determined. Please stay tuned to NAHC Report for additional details about the budget compromise.